Vice President George Bush yesterday renewed the Reagan administration's push to give equal weight to tax and budget reform, despite congressional pressure to emphasize deficit reduction.
"We consider tax reform and budget reform to be the necessary complements of each other," Bush said at the U.S. Chamber of Commerce "Spirit of Enterprise" dinner. "They are the twin engines of growth that will power our economy to new heights of prosperity, productivity and job creation."
The White House has not yet endorsed a specific tax reform proposal, but Bush said the administration will support one that simplifies the tax process, reduces marginal rates to a maximum of 35 percent and cuts corporate tax rates.
The Treasury Department has proposed an overhaul of the tax structure that would reduce corporate tax rates, but would eliminate many business deductions and thus generally would increase the amount of taxes paid by companies.
The vice president also referred to the sluggish European economic recovery as the result of excessive government spending and pointed to Japanese prosperity as the product of deep tax cuts.
"It is not uncommon for European governments to be eating up between 40 and 50 percent of their country's gross national product," Bush said. "It's no wonder, then, that Europe's descent into recession was deeper and lasted longer than ours, and that their recovery has been comparatively sluggish."
U.S. government spending "is growing out of control and . . . is endangering the long-run health of the country," Bush said. "It's time to put this gargantua of a government on a diet; otherwise it will continue to eat away at our future prosperity."
Last week, the White House proposed federal spending of $973.7 billion for fiscal 1986. U.S. government spending has grown as a percentage of GNP, to an estimated 24.8 percent next year from 23.5 percent in fiscal 1981.
Bush said the U.S. economy has created more than 26 million jobs in the last 15 years. "We owe it to the next 26 million not to follow the big-government example of Europe; we owe it to the next 26 million to get our budget under control and to keep the economy growing," he said.
He also said the "economic freedom" of the U.S. marketplace promotes moral values of benefit to society.
"It makes us better neighbors of one another," Bush said. "A free people, acting daily in a free marketplace, learn empathy. Economic freedom makes it in our self-interest to see the world as others see it and help them do what they want.
"A free person profits by inventing something and teaching others to use it to their profit," Bush said.